Are you reading your data correctly?
00:06 Let’s talk about the difference between data and analysis.
00:11 Because I frequently see people looking at data in organisations,
00:15 but not necessarily doing the analysis or understanding what that data is telling them.
00:20 So let’s have a look at this typical sales performance scorecard you might see somewhere.
00:25 And what can you see immediately is sales are down 6%.
00:31 That’s terrible. That’s a disaster. What are we going to do?
00:34 But is that really telling us the story?
00:37 Or is this something else going on?
00:40 So let’s look at the historical performance.
00:44 Let’s look at the last six months.
00:46 What story does this tell us?
00:49 Well, that’s still a pretty bad story where we’re trending down,
00:53 we’ve got six data points,
00:56 and they’re all going in one direction,
00:58 they were going in the wrong direction.
01:00 So that’s not great either, is it?
01:02 Let’s have a look even broader again,
01:06 and see what that’s telling us.
01:08 And we can see the last twelve months.
01:10 Actually, we had the first six months of the year went really, really well.
01:13 And then we had the second six months of the year, go really poorly.
01:18 So I’m still concerned about our performance,
01:21 because this still looks like we started off well,
01:24 and then we lost steam and things are going poorly.
01:27 So is that telling us the picture that we’re really falling away from our performance?
01:34 Well, let’s look at the last two years in comparison.
01:39 And that suddenly tells us a very different story.
01:43 And actually, what we can see here is that our performance this year,
01:48 is exceeding the last two year’s performance.
01:52 So once we always see a downturn in June,
01:55 it’s predictable, it’s expected.
01:57 And in fact, instead of being upset that we are minus 6%,
02:01 in terms of our sales,
02:02 we should be celebrating the fact that the previous year
02:07 was minus six and a half percent and the year before that was minus 7%.
02:12 So we’re actually getting better at minimising this drop off in sales.
02:19 It turns out that our performance is fairly predictable,
02:23 and follows a natural allocation over the course of the twelve months.
02:29 So just looking at data.
02:30 And a single data point can be really, really misleading.
02:35 You’ve got to understand the context of that data,
02:38 and what it really means.
02:40 And in organisations, we see people reacting to single data points.
02:44 This month’s performance,
02:46 or last month’s performance wasn’t as good or was negative or miss targets
02:52 but we’re really bad at looking at the context behind what that data is telling us.
02:58 And the analysis, the comparative analysis that goes with it.
03:02 So next time you see a single data point in isolation,
03:05 have a little alarm bell go off and think well what’s the context behind that data?